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PACIFIC SCIENTIFIC'S BROWER COMMENTS ON MARKET SHARES R&D PLAN AND FINANCIAL STRENGTH

 PACIFIC SCIENTIFIC'S BROWER COMMENTS ON MARKET SHARES
 R&D PLAN AND FINANCIAL STRENGTH
 NEWPORT BEACH, Calif., Dec. 13 /PRNewswire/ -- Pacific Scientific Co. (NYSE: PSX) Chairman, President and Chief Executive Officer Edgar S. Brower told approximately 100 analysts, brokers and money managers at the Philadelphia Securities Association Wednesday that his company is preparing new products for niches in which it has strong market shares. Brower said that PSX, a manufacturer of electrical equipment, is emerging with considerable financial strength from a five-year restructuring of its operations to world class manufacturing standards.
 During the meeting, Brower said that his company's principal market niches are in (a) electric motors and controls; (b) aircraft safety equipment; (c) devices for electric utilities; and (d) particle detection instruments. He said that the company, with about $175 million in sales, holds strong market shares with approximately $75 million in annual sales to markets where PSX holds 25 percent to 100 percent shares, and $60 million in sales to markets where PSX holds shares from 10 percent to 25 percent.
 "Our objective is that a quarter of our sales are from products developed in the last three years," Brower said, "which makes our current R&D program extremely important." He said that PSX has spent 5 percent of sales for R&D during 1991, an increase over 1990's 4 percent of sales on approximately comparable levels of sales . He discussed new products ranging from the company's thermal imaging aircraft fire detection systems to upcoming new products in outdoor lighting controls and fault indicators for detecting the location of faults in electric utility lines.
 In addressing the financial impact of PSX's new manufacturing and product development programs, he said that productivity has increased dramatically as concurrent engineering and other world class techniques have been employed. "Revenue per employee has risen from $89,000 in 1988 to approximately $112,000 in 1991. In 1992, sales per employee is expected to be $123,000 based on the current employment level of 1,400. That trend has been complemented by a reduction in our needs for inventory; inventory has declined from a 1988 high of $47.2 million to a projected 1991 year-end figure of approximately $32 million while inventory turns have risen steadily from 2.8 to 3.8." He said that Pacific Scientific's bank debt, including both long term and short term borrowings, has fallen from a 1988 high of $38.5 million to a projected 1991 year-end level of $13 million. "Our expected cash flow will be available to further reduce debt in 1992," he said.
 In response to questions, Brower said that PSX is not currently buying back common shares. "PSX shares are pretty clearly undervalued," Brower said, "but we have strong concerns about decreasing the already small float by removing shares from the market." He also indicated that PSX remains interested in acquisitions that fit the company's strategic plan. "With our low long term debt-to-equity ratio of 0.5:1, we have plenty of opportunity for strategic acquisitions," he said. Last May the company announced a plan to repurchase its preferred stock presently outstanding.
 Brower indicated that Pacific Scientific anticipates relatively flat revenues while the economy remains in recession, but that operating profit should improve in 1992. "When the economic upturn gets here," he added, "we should see sales growth resume. And our goal is to get net earnings in excess of 5 percent of sales."
 Emphasizing that PSX common shares are trading at one-third discount to their book value, Brower offered pricing comparisons to numerous other electrical equipment manufacturers' shares. "Whether you look at sales per share, book value or price-earnings multiples, PSX is being given one of the lowest values among comparable companies," he said.
 Pacific Scientific's core business is designing, manufacturing and marketing technology-based proprietary products for niche markets. The principal markets served by the company include automation in factories and offices, aerospace and electric utilities.
 -0- 12/13/91
 /CONTACT: Joseph Allen of South Coast Group, 714-731-4341, for Pacific Scientific/
 (PSX) CO: Pacific Scientific Co. ST: California IN: SU:


DM-CH -- LA008 -- 2401 12/13/91 13:26 EST
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Publication:PR Newswire
Date:Dec 13, 1991
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